YIKES!!!! Only 8.1% comps!!!! Everyone rush to sell your shares...
...to me. :-)
I know that lots of people will view 8.1% as "bad" (what a riot!) compared with the high SSS numbers of the past. I'm waiting to see how the other retailers did in December.
Part of the silliness of SSS comparisons is that it ignores the total level of sales. I'm very happy that Hot Topic was actually able to outdo the outstanding results of last year. I'll be very happy with low comps going forward given the extremely high sales per square foot we now have.
going to use my ira Deli, it's not that i think the comps are bad, my employer would have killed for them! but i agree with another poster that there's opportunity for higher growth elsewhere; chcs's comps were up 37%, and chbs's were up 12%, even with horrendous weather in the upper midwest. as you could probably judge from my earlier, somewhat disjointed post, SELLING a stock is my major problem in playing this game. hott's been wonderful to me, it's still an excellent company, i simply think there are better companies. for discussion purposes, i'm using my ira for short-term buying, my regular account for long term, for taxation considerations, i.e., all withdrawals from my ira will be taxed at the same rate, in my regular account i can aim towards long-term capital gains, and deduct my losses. any opinions?
Before I get to my point, I want to applaud Deli, Ed, et al, for the excellent commentary of late. I am unworthy, oh Wise Ones (or is that Wise Guys?)!
Deli, I recall a conference call statement made a while back to the effect that HOTT is upsizing its smaller existing stores. These stores are then shifted back to the "new" store category for purposes of calculating SSS comparisons. I'm not sure I understand all of the accounting treatment or the number of stores involved, but it seems this process over the long run will continually boost SSS numbers by some incremental amount. Does anybody have a sense of how much this may help comps going forward? Given the small store base, even a small number of upgrades will help.
BTW, weather has been awful in my neck of the woods this holiday sales season. It's just another basis for easier comps next year. :-)
Wait untill you see the sales reports of other retailers. Hot Topic's 8.1% SSS will look outstanding compared with the others.
It is going to be progressively harder for the establishment portfolio managers to ignore this stock with its continued high EPS growth rate, low PE, and the outstanding sales that keep getting recorded.